India’s Gross Domestic Product (GDP) contracted by record 23.9 percent in the first quarter of financial year 2020-21, lowest in 24 years, according to the government data released on Monday. This is the worst quarterly GDP numbers ever recorded since India started compiling GDP data on a quarterly basis in 1996. The economic slump has been attributed to economic disruption caused by the coronavirus pandemic and subsequent lockdowns in the country.
National Statistical Office (NSO), Ministry of Statistics and Programme Implementation released the quarterly GDP data on Monday. As per this data, “GDP at Constant (2011-12) Prices in Quarter 1 of 2020-21 is estimated at Rs 26.90 lakh crore as against Rs 35.35 lakh crore in Q1 of 2019-20, showing a contraction of 23.9 % as compared to 5.2 % growth in Q1 2019-20”. This is the sharpest contraction and is worse than any of the G20 countries.
Gross Value Added (GVA) which is the measure of value of goods and services produced in a country, at basic price, at constant (2011-12) prices stood at Rs 25.53 lakh crore in Q1 FY21, against Rs 33.08 lakh crore in Q1 of FY20, showing a contraction of 22.8 percent.
According to the data, manufacturing, construction, and trade sectors have reported the worst slump of 39.3 %, 50.3 %, and 47% respectively. The mining and electricity sectors contracted by 23.3% and 7% respectively. Government expenditure also contracted by 10.3%.
Agriculture is the only sector that has reported a positive growth of 3.4%.
Estimates from experts indicate towards the economy entering into a recessionary phase.
The report released by NSO mentions that as restrictions were imposed on the economic activities not deemed essential, there has been an impact on the data collection mechanism as well. It mentions that data challenges in the case of other underlying macro-economic indicators like Index for Industrial Production (IIP) and Consumer Price Index (CPI) used in the estimation will also have implications on these estimates.